Don’t Listen to the Hype
From 1990 to 1997, Kevin Haggerty served as Senior Vice President for Equity Trading at Fidelity Capital Markets, Boston, a division of Fidelity Investments. He was responsible for all U.S. institutional Listed, OTC and Option trading in addition to all major Exchange Floor Executions. For a free trial to Kevin’s Daily Trading Report, please click here.
The discount opening yesterday on the jobs report set up the 1st hour Trap Door reversal strategy for day traders yesterday as the SPX declined from the previous 797.87 close to a 783.32 low on the 9:35 AM bar. Traders took either the entry above 785.86, or else the mini 123 continuation entry above 786.92. Those of you familiar with my strategies from the seminar and trading modules material also were ready for the RST short setup once the 810.48 high got taken out.
NYSE volume was 1.5 bill shs yesterday as the SPX went out at 811.08 (+1.7), INDU (+2.0). and QQQQ (+1.5). The over reactions to monthly economic data continues to be a bonus for day traders as the empty suits on CNBC hype the monthly economic numbers, which are primarily estimates, instead of what counts, which is the year-over-year change and direction of revisions, but if the “suits” did that they wouldn’t have near as much hype to justify their existence.
The toxic asset plan proposed by Geithner has to work for banks to start lending, but there are many who are very negative on the plan except, for a handful of major players that will buy the toxic assets because the Government essentially bears the cost of the assets that they buy. The mark-to-market changes should help but they can also result in significant manipulation. However, any positive hype on how the plan is working will be a catalyst for the market (short term).
The SPX futures are +15 points as I complete this at 8:45 AM, and the initial key Trap Door levels to key on today are the +1.0 Volatility Band at 827.50, and +1.28 VB at 832.09, followed by the 833 .618RT to 944 from 667. The SPX has not yet declined to any of the 770, 750, or 730 retracement levels after the 833 rally high, so it is not yet confirmed as a possible Wave 1 high. So far the SPX has held the rising 20DEMA, which is now 786.26, and also closed above the 797.67 50DEMA, so nothing bad happens until those levels get taken out, and a potential Wave 2 leg starts which could set up the 123 higher bottom. There is some time symmetry next week so it is likely they will key a market correction.
The next commentary will be April 13th. Happy Easter!
Have a good trading day!
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